How PatSnap grew to become a billion-dollar company

Taking a startup to unicorn status is no mean feat, let alone doing so straight out of college and in a rapidly changing and hard-to-penetrate space like intellectual property (IP). 

PatSnap, a Singapore-headquartered provider of patent insights, checks all three boxes. 

PatSnap’s leadership team: Jeffrey Tiong, CEO; Guan Dian, senior vice president for Asia Pacific; and Markus Haense, chief technology officer / Photo credit: PatSnap

Today, the startup’s software is used by the likes of US aeronautics agency NASA, electric-car maker Tesla, and entertainment powerhouse Walt Disney. PatSnap’s platform also played a significant role in the research and development of the Pfizer-BioNTech Covid-19 vaccine. 

As companies race to develop the next breakthrough in technology, PatSnap’s prominence is only set to increase, and venture capital firms are taking note.  

This month, the startup raised US$300 million from big-name backers like SoftBank Vision Fund II and Tencent Investment, giving its ambitions in Japan and China a boost. While its platform has been focused on enterprises, PatSnap co-founder Guan Dian suggests that an entry into the business-to-consumer space may be in the works. 

See also: They turned off the heater in winter to save money. Now they’re a leader in patent search

“We are in the early stages of exploring how we can leverage WeChat channels to push our services to more consumers in China,” she tells Tech in Asia. 

Founded in Singapore in 2007, PatSnap provides a platform for researchers looking to search and analyze IP trends. The company’s datasets include legal, corporate and financial records as well as patents, licensing deals, and a pharmaceuticals and life sciences database. Users can look up information in the relevant fields by simply providing a keyword.

Today, PatSnap has regional offices in the US, Europe and China. The company’s customer base and employee headcount have also grown 60% to 70% annually over the last five years, according to Guan.

As a software-as-a-service (SaaS) company, PatSnap draws the bulk of its revenue from subscriptions. Two-thirds of its subscription revenue, which typically range between US$20,000 to US$30,000 annually, come from clients based in the US and Europe. Guan also shares that several high-profile customers have also shelled out half a million. 

From zero to one

The startup’s value proposition was so strong that it had inked the deal with Masayoshi Son, founder of Japanese conglomerate SoftBank, in “less than half an hour,” PatSnap CEO Jeffrey Tiong said.

But that wasn’t always the case for PatSnap, and a lack of investor interest and funds threatened to kill the company in its crib. 

In some ways, PatSnap was ahead of its time. Innovation intelligence, or the discovery of ideas and processes and then combining them to derive insights, was virtually unheard of at the turn of the new millennium. Even intellectual property analytics, a subset of innovation intelligence that PatSnap initially focused on, was relatively nascent in Southeast Asia.

In 2008, a decision to relocate the company to China was also fraught with hardship. To stretch their limited finances, the team resorted to switching the heater off to reduce their electricity bills. The brutal efficiency of business in the Middle Kingdom also forced PatSnap to adapt quickly or die.

Next phase of growth 

Sky’s the limit

“PatSnap has built a very powerful tool, and it’s going to be difficult to replicate what they have done.”